Two in a Row

Michigan repeats as nation's top Digital State.

Michigan continues to lead the nation in applying technology to the art of governance, ranking first in the 2006 Digital States Survey.

Conducted by the Center for Digital Government, the Digital States Surveyis a comprehensive biennial study of technology use by state governments. The survey measures progress in deploying online services for citizens and businesses, developing strategic plans and policies, and adopting effective IT architectures and infrastructure.

Michigan, which also topped the Digital States in 2004, scored well across all survey categories this year. A massive IT consolidation effort launched several years ago continues to pay off in the form of efficient enterprise applications and shared resources.

The state retired or consolidated more than 1,000 servers in 2005, and shut down eight data centers. And more than 30,000 of Michigan state government's 55,000 e-mail accounts have been moved to an enterprise-messaging infrastructure.

At the same time, Michigan launched innovative electronic services such as the Michigan Timely Application and Permit Service (MiTAPS), a Web-based application that allows citizens and businesses to apply electronically for approximately 100 different types of permits and licenses. Applications such as MiTAPS earned Michigan's Web portal a top ranking in the Center for Digital Government's 2006 Best of the Web Survey, which was released in August.

Michigan CIO Teri Takai attributed her state's IT success to tech-friendly state agencies and steadfast support from Gov. Jennifer Granholm.

"Michigan has a long history of being technology interested and technology savvy, so we don't have to convince agencies to use technology. They're dying to use it," said Takai, a former technology executive at EDS and Ford Motor Co. who joined Michigan state government in 2003.

"And we continue to enjoy the full and open support of the governor," she added. "That means everybody pays attention to us as we drive for change in the way the state uses technology."

Top Finishers
Michigan was followed in this year's Digital States Surveyby second-ranked Virginia and third-ranked Ohio. Utah and Arizona rounded out the top five.

The top finishers tended to be led by governors who understand the importance of technology, said Paul Taylor, chief strategy officer for the Center for Digital Government. They also had CIOs who are skilled at aligning technology projects with business and policy objectives.

Both Michigan and Virginia have maintained a consistent focus on using technology to improve government. Michigan's Granholm made technology a key part of her efforts to boost government efficiency and resuscitate her state's lagging economy. And former Virginia Gov. Mark Warner was widely recognized as one of the nation's most technologically literate chief executives.

The ability of both states to continue these efforts could be tested in 2007, however. Granholm faces a tough re-election bid in November, and Warner left office in December 2005, a victim of Virginia's one-term limit for governors.

An administration change can have significant impact on IT progress if technology isn't a priority for the new chief executive, said Taylor, noting that Washington state, a perennial top finisher in the Digital States Survey, fell from the top 10 this year after Gov. Christine Gregoire replaced Gov. Gary Locke in 2005.

"Washington went from No. 3 in 2004 to No. 16 this year," he said. "That's because the new administration had different priorities."

Like Michigan, Virginia spent several years consolidating and centralizing its technology resources initiatives. But the two states took different operational approaches. Where Virginia widened its use of outsourced services, Michigan increased its reliance on internal staff.

And although wholesale centralization played a key role for the top two Digital States finishers, it's not the only path to success, Taylor said.

"You don't have to do that level of consolidation to score well," he said. "We have seen states that have done this in a semi- and sometimes nonconsolidated way. But all of the top finishers managed to aggregate demand and get the best use of taxpayer dollars."

Political and economic pressures have chipped away at turf issues that blocked the sharing of IT infrastructure and applications in the past, Taylor added.

"Turf used to be defined as having your own IT staff, data center and systems. I think most operating agencies are now of a view that they have more mandates and real business than they can handle," he said. "If someone else can provide a hosting environment and reliable network capacity, they'll consider that."

Positive Pressure
Takai said economic pressure has been a constant companion during her tenure as Michigan's CIO, forcing the Department of Information Technology (DIT) and other state agencies to innovate.

"We cut 25 percent from our budget in the first year, but we decided we weren't going to lie down and die," she said. "That meant we had to be more efficient. And it meant that it was important to think about new and different ways of doing business rather than just maintaining the same old stuff."

Ken Theis, chief deputy director of the DIT, said the state worked closely with businesses of all sizes to create the MiTAPS application. The new online service replaced multiple paper application processes for major licenses and permits issued by the state.

"In some cases, it takes months off the processing time for critical permits," Theis said. "That obviously can have an impact on Michigan's economy."

At the same time, ongoing data center consolidation is cutting the cost of operating Michigan state government. "We are going to see some dramatic rate reductions in 2007 as a result of combining demand," said Pat Hale, director of technical and data center services. "We're also focusing on improving our service levels, so there are going to be real benefits from a customer perspective."

Takai said her organization focuses on matching its technology efforts to Granholm's policy priorities. That effort results in high-profile support for IT initiatives from the governor and Cabinet members.

"We aligned ourselves very early with the business, so we had a very clear picture of where we wanted to go," Takai said. "I truly believe that persistence in having a structure that your organization believes in is how you sustain growth year over year -- particularly in state government.

"Now when the governor talks about her economic development plan for Michigan, she talks about MiTAPS," Takai added. "So it's not just us talking about technology. It's a major part of making Michigan ready for new businesses."

Next, Michigan intends to launch an enterprise grant management system that will automate and simplify the process of applying for state funding grants.

"Today a nonprofit organization may be applying for 10 to 20 different grants and doing that in 10 to 20 different ways, so it's a very time-consuming process," said Theis. "Our vision is to have one Web-based application where nonprofits can select the grants they want to apply for and automate the entire process."

Making Progress
Overall, the 2006 Digital States Surveyshowed that states are strengthening their strategic planning efforts. Nearly 75 percent of the 44 responding states said they had created a strategic plan and had updated it within the past two years. Only 60 percent said they had done so in the 2004 survey.

The 2006 survey also evaluated 32 types of online services for citizens and businesses. Online job searches, nursing license renewals, uniform commercial code (UCC) filings and searches, and vehicle registration renewals ranked among the most mature and widely offered electronic services. In many states, the Internet now is the default channel for these transactions.although wholesale centralization played a key role for the top two Digital States finishers, it's not the only path to success, Taylor said.

"You don't have to do that level of consolidation to score well," he said. "We have seen states that have done this in a semi- and sometimes nonconsolidated way. But all of the top finishers managed to aggregate demand and get the best use of taxpayer dollars."

Political and economic pressures have chipped away at turf issues that blocked the sharing of IT infrastructure and applications in the past, Taylor added.

"Turf used to be defined as having your own IT staff, data center and systems. I think most operating agencies are now of a view that they have more mandates and real business than they can handle," he said. "If someone else can provide a hosting environment and reliable network capacity, they'll consider that."

Positive Pressure
Takai said economic pressure has been a constant companion during her tenure as Michigan's CIO, forcing the Department of Information Technology (DIT) and other state agencies to innovate.

"We cut 25 percent from our budget in the first year, but we decided we weren't going to lie down and die," she said. "That meant we had to be more efficient. And it meant that it was important to think about new and different ways of doing business rather than just maintaining the same old stuff."

Ken Theis, chief deputy director of the DIT, said the state worked closely with businesses of all sizes to create the MiTAPS application. The new online service replaced multiple paper application processes for major licenses and permits issued by the state.

"In some cases, it takes months off the processing time for critical permits," Theis said. "That obviously can have an impact on Michigan's economy."

At the same time, ongoing data center consolidation is cutting the cost of operating Michigan state government. "We are going to see some dramatic rate reductions in 2007 as a result of combining demand," said Pat Hale, director of technical and data center services. "We're also focusing on improving our service levels, so there are going to be real benefits from a customer perspective."

Takai said her organization focuses on matching its technology efforts to Granholm's policy priorities. That effort results in high-profile support for IT initiatives from the governor and Cabinet members.

"We aligned ourselves very early with the business, so we had a very clear picture of where we wanted to go," Takai said. "I truly believe that persistence in having a structure that your organization believes in is how you sustain growth year over year -- particularly in state government.

"Now when the governor talks about her economic development plan for Michigan, she talks about MiTAPS," Takai added. "So it's not just us talking about technology. It's a major part of making Michigan ready for new businesses."

Next, Michigan intends to launch an enterprise grant management system that will automate and simplify the process of applying for state funding grants.

"Today a nonprofit organization may be applying for 10 to 20 different grants and doing that in 10 to 20 different ways, so it's a very time-consuming process," said Theis. "Our vision is to have one Web-based application where nonprofits can select the grants they want to apply for and automate the entire process."

Making Progress
Overall, the 2006 Digital States Surveyshowed that states are strengthening their strategic planning efforts. Nearly 75 percent of the 44 responding states said they had created a strategic plan and had updated it within the past two years. Only 60 percent said they had done so in the 2004 survey.

The 2006 survey also evaluated 32 types of online services for citizens and businesses. Online job searches, nursing license renewals, uniform commercial code (UCC) filings and searches, and vehicle registration renewals ranked among the most mature and widely offered electronic services. In many states, the Internet now is the default channel for these transactions.

Online transactions such as UCC filings and professional license renewals are popular because they save both money and time, Taylor said. "There is real economic value to all parties in those transactions to do them in an online environment."

Among the least mature online services were driver's license renewals, reverse auctions, child support billing and payment, and contractor status searches. These initiatives tended to be in the planning and pilot stages in most states, according to the survey.

States also have launched low-profile experiments with podcasts, blogs and RSS feeds. Furthermore, some agencies are exploring how to incorporate Wikipedia-style collaboration into government processes.

For instance, wikis are proving useful for facilitating interaction among government and private experts on subjects such as water quality. The technique helps preserve discussion that occurs before agencies reach a consensus on policy.

"Just like Wikipedia, you can often go online and read the debate," said Taylor. "That's really a hopeful development for people who are concerned about government transparency."